The Zhitong Finance App learned that on October 12, the Royal Swedish Academy of Sciences announced that the 2026 Nobel Prize in Economics will be awarded to Stanford University professor Robert E Hall and Columbia University professor Michael Woodford in recognition of the microeconomics foundation they have laid for macroeconomic stability policies.
Robert E Hall and Michael Woodford received this year's Economic Science Award for showing how to restructure economic models to revitalize stability policies. Instead of building models based on statistical links between macroeconomic variables (such as inflation, production and consumption), they chose to base their models on microeconomics. This includes understanding how the overall number of households and businesses affects the economy through their actions.
A core component of these models is that households and businesses are forward-looking when making savings or product pricing decisions. When governments and central banks communicate their economic policy plans, they can influence this view of the future and push the economy in the right direction. Since their introduction, these new models have been extremely useful in dealing with the economic downturn affecting us.
Robert E Hall was born in 1943 in Palo Alto, California, USA. Received a doctorate degree from the Massachusetts Institute of Technology Cambridge in 1967. Professor at Stanford University in California, USA.
Michael Woodford was born in 1955 in Chicopee, Massachusetts, USA. Received a doctorate degree from the Massachusetts Institute of Technology Cambridge in 1983. Professor at Columbia University in New York, USA. Michael Woodford is also an important scholar of modern macroeconomics and monetary policy theory. He contributed to monetary policy theory and practice. He urged the central bank to use “forward-looking guidelines” to manage public expectations and inflation dynamics, and incorporate rational expectations, price adjustments, and monetary policies into a more systematic macroeconomic analysis framework to explain how the central bank's policy actions and communication influence the decisions of economic agents. He has systematically demonstrated the superiority of a regulated monetary policy, and its theoretical framework has had a profound impact on global macro-control.